Register  
Sukuk demand to reach US$900bn in five years
Thursday, 13 September 2012 12:45pm

Global demand for Sukuk is forecast to triple from US$300 billion to US$900 billion by 2017, according to recently released estimates from Ernst & Young.

Conventional institutions are increasingly demanding Shari'a compliant securities alongside Islamic banks in the wake of the euro-zone debt crisis as a result of the real-asset backed nature of the Islamic products.

Islamic banking is currently growing at an annual rate of more than 10% driving an increased appetite for Sukuk that extends to fund managers and high net worth individuals.

"Major South East Asian and Middle Eastern companies are tapping into the international Sukuk market to raise Shari'a compliant funds. Global financial firms are also in the fray to raise money through Sukuk instruments and to offer Shari'a compliant products," said Ashar Nazim, Ernst & Young's MENA Islamic finance services leader.

The fastest growing segment is Ringgit-denominated Sukuk, which accounts for more than two thirds of total global issuance, according to the EY report, with Malaysia regularly tapping into the Sukuk market to support its infrastructure development program.

The Sukuk market is largely dominated by governments seeking project funding, with 86% of total issuances in 2011 flowing from sovereign linked entities.

Despite the upsurge of global interest in Islamic debt post-GFC, Sukuk issuance platforms are currently proprietary to a few Islamic institutions, which the EY report says, may act as a restriction to the growth potential of the industry posing a supply side restriction even as demand rapidly rises.

"There is an urgent need for a new direction in the market to be led by leading Islamic financial institutions and multilateral institutions in a collaborative manner," Ashar said.

"Globally, at least 14 Islamic banks today have the financial muscles to venture into international Sukuk capital market."

He identifies the necessary pre requisites as international connectivity, Sukuk structuring and trading expertise and balance sheet strength.

Blogs
Follow the industry experts.
Christopher Page
Christopher Page
Managing Director

A new regulator? Better empower ASIC
The Australian financial services industry and Australia's financial advisers already have regulator dedicated to policing standards ...read more
 
Benjamin Ong
Benjamin Ong
Chief Economist

Reflation, rotation and the taper
'Tis being my final type (drivel, to some gentle readers) for the year, we'll take a look back at the 2013 that was to seek the lessons ... read more
 
Alex Dunnin
Alex Dunnin
Director of Research & Editorial Services

Thought leadership and the art of living dangerously
Superannuation is one of the Australian economy's major pillars and it is time its leaders stepped out from behind their abacuses and ... read more
News Search   
VideoBrought to you by
Managed Accounts Forum 2014 Highlights
Around 150 delegates attended Financial Standard's inaugural Best Practice Forum in Managed Accounts held in Sydney in August. Financial Standard also launched a new magazine: FS Managed ... Watch video
Colonial First State Multi-Asset Real Return Fund
Find out more about the investment philosophy and objective of the Colonial First State Multi-Asset Real Return Fund. Senior Portfolio Manager, Kej Somaia explains. Watch video
The New Neutral
At this year's PIMCO Secular Forum, the company's global executives set themselves the challenge of taking a three to five year view and anticipate where the market would be against what investors would ... Watch video
Introduction to Series #07
What are the key challenges advisers face when building retirement portfolios for clients? Watch Joe Fernandes, Head of Global Investment Solutions at Colonial First State Global Asset Management. Watch video
Zurich Investments Global Growth Share Fund
The pool of investable funds in the retail sector is ever growing, and as investors become more sophisticated the appetite for global equities is only going to increase. In this video, Noble says with ... Watch video
Why Multi-Asset Solutions?
Joe Fernandes, Head of Global Investment Solutions at Colonial First State Global Asset Management talks about the advantages of objective-based investing in the multi-asset space. Watch video
Get it
Daily
FREE to your inbox, get the Financial Standard Daily Email.
Get the Free
iPad app
Download the Financial Standard iPad app for FREE
Industry
Events
OCT
31
NOV
05
ALTERNATIVE INVESTMENTS 2014 CONFERENCE
12
Global CIOS Symposium
13
2014 Financial Standard Social Media Influence, Leadership + Excellence Scholarship Program (SMILEYS)
21
SelectingSuper Awards 2014
DEC
02
FEAL - La Trobe Financial National Achievement Awards
News
Bites

$245 (inc GST) for 1 year
 
 
Copyright © 1992-2014 Rainmaker Group
All material on this site is subject to copyright. All rights reserved. No part of this material may be reproduced, translated, transmitted, framed or stored in a retrieval system for public or private use without the written permission of the publisher.
Link to something 9OiuHz77